Lord Williams of Elvel: Does the noble Lord, Lord Mottistone, understand the procedure in this Committee? We are probing for information. The fact that we give notice of our intention to oppose that a clause stands part does not mean that we oppose the clause. We are having an exchange where we require and ask the Government for information. It is not that we do not appreciate the associations. The noble and gallant Lord, Lord Bramall, quite rightly pointed out that I said on Second Reading that the associations were part of the umbilical cord. I hope that we can get that straight so we are not always criticised by the noble Lord, Lord Mottistone, for opposing things to which we are not in fact opposed. If we want to oppose things, we will oppose them at the Report stage of the Bill.

Earl Howe: Clause 112 specifies the powers and duties which may be assigned or transferred to associations to meet their responsibilities. As my noble friend, Lord Mottistone, has pointed out, the provisions in the clause represent an updating, if you like, of the provisions in the 1980 Act. Substantively and substantially, the provisions remain unchanged.

The main responsibilities of associations include the recruitment and welfare of the Territorial Army and Royal Auxiliary Air Force; the provision and maintenance of accommodation for the Royal Naval Reserve, the Royal Marine Reserve, the Territorial Army, the Royal Auxiliary Air Force and the Cadet Forces; and liaison with the civilian community, especially the maintenance of employer support for the reserve forces. Here, the noble Lord, Lord Judd, directed our attention to subsection (2)(e), and the watchword in connection with that part of the clause is "consultation". It is that liaison with the civilian community that the associations do so well. I believe that the subsection fairly describes that activity.

Subsection (2)(a) prevents the associations having any control over the organisation of units of the Territorial Army and the Royal Auxiliary Air Force when they are training on duty or in permanent service. That, again, reflects the current position.

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The noble Lord drew attention to subsection (4) which provides that associations should not have "powers of command or training". There is no need for them to have such power. The functions of the associations necessarily have to be distinguished from those of the chain of command. It would be very odd if the associations had powers which cut across that chain.

The local associations and their council continue to work hard at getting the message across, as does the National Employers' Liaison Committee. Events such as Exercise Executive Stretch, where employees of local businesses participate in a range of outdoor activities over a weekend under the supervision of the TA, and Bring-a-Boss evenings are two examples of how the reserve forces are promoting themselves to employers. Some problems, inevitably, occur from time to time and some reservists find it difficult to meet their reserve commitment because of pressure from employers.

The services are always considering further ways of adapting to the more flexible employment patterns that exist today, so that reservists can more easily meet their reserve commitment.

The Government greatly appreciates the support which the associations have provided to the reserve forces over the years. They have given enormous support to the process of consultation over this Bill and for that we are also grateful. We see no need to disturb what is a very satisfactory and effective relationship.

5.15 p.m.

Lord Judd: I am grateful to the noble Earl. It is always valuable in these exchanges to have this unrivalled insight and experience from the noble and gallant Lord, Lord Bramall, and the noble Lord, Lord Mottistone. They inform our proceedings and will be on the record for future reference, which is therefore very important. We on the Opposition Bench are second to none in our admiration of the territorial and reserve forces. We shall not yield to the Government on that. Those forces have a powerful record in national life. They have been an important element in the whole social fabric of our society; we would not dream of suggesting otherwise. However, I suspect--and I say no more--that some of the issues referred to in the clause will re-emerge with the passage of time in one way or another. We are at a very significant moment in the organisation of the armed forces in this country. The relationship is not as it always has been. The noble Lord, Lord Mottistone, says there is nothing new. I am sure that he will not mind my saying that that is slightly our anxiety and we are in a new situation. More searching reflection on the implications of that new situation might have been helpful as a background to the wording and drafting of the clause.

It is clear that the main defence effort from now on will be centrally more dependent upon the reserve forces. There will be less flexibility within the regular permanent services and a more immediate demand for a critical role by the reserve forces. In the spirit of that development, clear lines of authority of command are

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most important. Any confusion about just what the association is able to look after and what others must look after needs to be dealt with.

We would not want to delay any further--we could not in any case under the conventions of this Committee--the passing of the clause, but we say in good faith that it contains a great deal that is of central significance to the implementation of the Bill.

Clause 112 agreed to.

Clause 113 agreed to.

Clause 114 [Accounts of associations]:

On Question, Whether Clause 114 shall stand part of the Bill?

Lord Williams of Elvel: Once again this is a request for information from the Minister. We are dealing here with the accounts of associations. These will be made up in a manner to be specified in future regulations. Would the Minister be good enough to give us some idea of what the regulations will say? Will they allow associations to accumulate reserves? Will they specify the ring-fencing of certain activities that are not related to the matters discussed in Clause 112? Will they provide for auditing? Will they provide for who should audit and in what form the accounts should be set out? I should be grateful if the noble Earl could give us some idea of what is proposed. As a specific question, will the form of the accounts be approved by Her Majesty's Treasury?

Earl Howe: This clause spells out the requirements for auditing the associations' funds and reproduces Section 126 of the Reserve Forces Act 1980, which is to be repealed. It requires associations to make up accounts and to have them audited annually in accordance with regulations. Copies of the accounts and the auditors' report are required to be sent to the Defence Council or as directed in regulations. The requirement for the submission of annually audited accounts and for copies of auditors' reports supports the MoD's own accounting procedures.

The day-to-day management of TAVRA funding is the responsibility of the Command Secretary HQ Land and the audited association accounts are sent to him for scrutiny. The noble Lord may be interested to know, as an aside, that the TAVRA regulations require public and private funds to be identified separately in association accounts, and these provisions are in practice applied in the accounts.

Lord Williams of Elvel: I am grateful to the noble Earl as far as we go. Do I assume that the public funds that he refers to are those which are specific for the purposes of the TAVRAs as defined in Clause 112 and that other activities which they may engage in should be properly regarded as private. Can he possibly say whether the Treasury would have any input in deciding the way in which TAVRA accounts are made up, and the method of audit?

Earl Howe: I would be happy to write to the noble Lord with further details on this but, in answer to his first question, associations only generate income from

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the element of the overall TAVRA grant relating to the general administration of the TA. Such income does not arise from the element of the grant allocated for TAVRA administration or the TAVRA estates.

Associations are able to invest this element of the TAVRA grant and are permitted, under TAVRA regulations, to use the income that has been generated for TA general administration purposes without prior approval from the Ministry of Defence. This income is treated as coming from a private rather than a public source as it does not come directly from the Ministry of Defence but rather from the institution with which the money has been invested. This gives flexibility to local decision-making, which the associations I believe greatly appreciate, and it is very much in line with the department's own arrangements for delegation of responsibility.

With that explanation, I hope that the noble Lord will be content, subject to my following up in correspondence the further points that he raised.

Clause 114 agreed to.

Clause 115 agreed to.

Clause 116 [Regulations as to associations]:

Lord Williams of Elvel moved Amendment No. 46:

Page 62, leave out lines 19 to 25.

The noble Lord said: I beg to move Amendment No. 46 standing in my name and that of my noble friends. I should be most grateful if the noble Earl could explain to the Committee what subsection (1)(h) of Clause 116 means. Having read through it several times I am afraid I cannot understand it. Perhaps he can explain it in simple English.